Cargill beef processing plant to lay off 2,000 in Plainview

Cargill announced today that it will idle the Plainview cattle processing facility. The facility will close on February 1st and impact 2,000 workers.

The closure of Plainview’s and Hale County’s largest employer, the Cargill beef processing plant, could mean a yearly loss of $1.1 billion in economic activity.

“If it happened in Amarillo, it would be hard. But in Plainview, it will be devastating,” said Texas A&M AgriLife Exension Economist Steve Amosson. “This is going to be really hard on Plainview because Cargill employs nearly 2,000 people with a payroll over $60 million. It’s 38 percent of the industry output of Hale County.”

About 120 of those losing jobs live in Amarillo, said company spokesman Mike Martin. They are predominately immigrants from Africa.

The aftermath will see even more jobs gone as Cargill’s suppliers struggle and local businesses suffer.

“Then you don’t need somebody serving hamburgers in McDonald’s,” Amosson said. “As this ripples through the economy, you’re getting close to 3,000 jobs lost. That’s over 15 percent of the employment in the county.”

The plant will close at the end of business Feb. 1. The company is required by federal law to give its employees 60 days’ notice that they will lose their jobs, so it will be paying them into mid-March.

Years of drought have prevented cattle raisers from increasing the beef cattle herd, and the lack of cattle has made Cargill consolidate its operations.

The Plainview plant was already operating fewer than 40 hours per week due to the cattle supply shortage.

“The decision to idle our Plainview beef processing plant was a difficult and painful one to make and was made only after we conducted an exhaustive analysis of the regional cattle supply and processing capacity situation in North America,” said John Keating, president of Cargill Beef, based in Wichita, Kan. “We were compelled to make a decision that would reduce the strain created on our beef business by the reduced cattle supply.”

Cargill’s beef plant in Friona will continue operating. It also employs about 2,000 people. Each plant has the capacity to process approximately 4,500 head of cattle per day, according to information from the company.

The company will maintain the Plainview plant for reopening if cattle numbers increase, but does not expect that to happen for years.

“It could be five years, maybe 10, if you’re waiting on the cattle inventory to return,” Amosson said. “The cattle herd is the lowest it’s been since 1952.”

Tyson Fresh Meats, the second-largest single employer in Amarillo with 3,700 positions, is also feeling the pressure but doesn’t expect as dramatic a response.

“We currently have no plans to idle our beef operations in the region,” said Tyson spokesman Gary Mickleson. “Our Amarillo plant continues to operate as usual, but at slightly reduced hours due to current market conditions.”

The closing’s impact on the cattle feeding industry and cattle prices is unclear.

“With all the pressures on supply, it’s probably too early to know if there will be an effect on prices,” said Jim Brett Campbell, spokesman for the Texas Cattle Feeders Association. “Any time you have one less buyer in a tight market, you get concerned.”

In the meantime, Cargill is working with its employees.

“There is a job fair slated for Plainview next week to provide information about job opportunities at other Cargill facilities in the region,” Martin said. “The company will also be working with the Texas Workforce Commission to help people find jobs.”